Markets and macro commentators obsess over every data release and constantly shift their views on recession and inflation risks. So what will this year look like?
When inflation first started to rise on the supply side in 2021, Wall Street rewarded companies that had 'pricing power' to raise prices and research was published to help investors identify these companies. https://www.capitalgroup.com/advisor/insights/articles/inflation-pricing-power.html Wait...aren't those some of those industries also having supply chain issues?
After 30 years of market consolidation, pricing actions are closely followed/replicated in many industries. Fewer choices for consumers, higher prices and little competition to push prices down. When possible, labor demands higher pay; or local legislation increases higher minimum pay which leads to wage compression.
18 months later...we need to fight the tight labor market?
Have you read Brad Delong’s “Slouching Towards Utopia: An Economic History of the Twentieth Century”? If so, do you recommend it. I regularly read his posts.
This makes lots of sense. I'm a little puzzled about the distinction between a "Top Gun Landing" and a "Softish Landing." I get that we can go through stuff on the way to a good and prosperous economy with no fears of ongoing inflation and that we don't have to have the onerous effects of a serious recession, but it's easy enough to imagine the kind of recession that's mostly not noticed but some economists tell us afterward that we were technically in one for a quarter or two. (slightly negative GDP growth, etc). I mean, that's not as precarious as hitting the deck with the engines out, to my way of thinking. Is there something I'm missing?
Everyone seems so obsessed with rate hikes and fail to realize that they do very little to address the actual causes of inflation. Whether its supply chains, corporate profiteering, or even the war in Ukraine. Further, we still have solid job growth, GDP growth and jobless claims are lower. Maybe I'm wrong but I don't see a recession coming. If wall street wants to be upset with that then that's fine, but the US economy has done a good job of bouncing back. It's a shame that the fed is trying to deliberately cause a recession when the data just keeps proving them wrong almost every time.
Does Lael Brainard's move to the WH strengthen the Fiscus by weakening the Fed's calmer voices on inflation, leaving hawks unconstrained from within their ranks?.
It's a loss for the Fed and a win for the White House. Fiscal is more powerful than monetary policy, so it's a gain for everyone that she is going to NEC.
“I continue to think the endless speeches and media appearances by Fed officials are muddying the water and creating market volatility.”
I couldn’t agree more. I view various Fed Governors’ public pronouncements are driven by egos.
When inflation first started to rise on the supply side in 2021, Wall Street rewarded companies that had 'pricing power' to raise prices and research was published to help investors identify these companies. https://www.capitalgroup.com/advisor/insights/articles/inflation-pricing-power.html Wait...aren't those some of those industries also having supply chain issues?
After 30 years of market consolidation, pricing actions are closely followed/replicated in many industries. Fewer choices for consumers, higher prices and little competition to push prices down. When possible, labor demands higher pay; or local legislation increases higher minimum pay which leads to wage compression.
18 months later...we need to fight the tight labor market?
I’ll have a post soon on profits and inflation.
Consolidation/monopoly with excess profits, profits and inflation please. :)
Thank you.
Never forget to consider the freak out from anticipation or the actual debt crisis being manufactured by the patriotic Republicans.
Have you read Brad Delong’s “Slouching Towards Utopia: An Economic History of the Twentieth Century”? If so, do you recommend it. I regularly read his posts.
This makes lots of sense. I'm a little puzzled about the distinction between a "Top Gun Landing" and a "Softish Landing." I get that we can go through stuff on the way to a good and prosperous economy with no fears of ongoing inflation and that we don't have to have the onerous effects of a serious recession, but it's easy enough to imagine the kind of recession that's mostly not noticed but some economists tell us afterward that we were technically in one for a quarter or two. (slightly negative GDP growth, etc). I mean, that's not as precarious as hitting the deck with the engines out, to my way of thinking. Is there something I'm missing?
my post is somewhat snarky. see footnote. I expect inflation to slow notably by the end this year and into next and unemployment to stay under 4%..
Everyone seems so obsessed with rate hikes and fail to realize that they do very little to address the actual causes of inflation. Whether its supply chains, corporate profiteering, or even the war in Ukraine. Further, we still have solid job growth, GDP growth and jobless claims are lower. Maybe I'm wrong but I don't see a recession coming. If wall street wants to be upset with that then that's fine, but the US economy has done a good job of bouncing back. It's a shame that the fed is trying to deliberately cause a recession when the data just keeps proving them wrong almost every time.
Does Lael Brainard's move to the WH strengthen the Fiscus by weakening the Fed's calmer voices on inflation, leaving hawks unconstrained from within their ranks?.
It's a loss for the Fed and a win for the White House. Fiscal is more powerful than monetary policy, so it's a gain for everyone that she is going to NEC.
Do you think the increase in re furniture and appliances is a reflection of new-home buyers, or are most people remodeling/staying in place, or both?
https://ritholtz.com/wp-content/uploads/2023/02/heatmap.png
Probably both.
Repeatedly no answer at that number Dr. Jeoff Gordon
housing prices are coming down.